Fewer Jobs, Persistent Racial Disparity

And that racial disparity in the unemployment numbers isn't just among younger workers. The overall unemployment rate of African-Americans is 13.2 percent. That is almost twice that of white Americans. Among Hispanics, it's 9 percent. Yesterday, we spoke with Darrick Hamilton, associate professor of economics at the New School in New York. He studies racial economic inequality and we asked him to try to explain any reasons behind the two-to-one gap in joblessness between blacks and whites.

DARRICK HAMILTON: Well, you know, I would say that there's plain old structural unemployment due to discriminatory barriers. You have a marginalized group that, the old adage goes, they're the last hired and the first fired. There's this two-to-one ratio that we've not been able to crack or address and I'd say largely it's due to barriers with regards to getting employment.

SIMON: What about some of the disparities people talked about in education?

HAMILTON: Yeah. Well, education is a factor, skill is a factor. But even when we cut across education, you still see this structure of at least a two-to-one unemployment difference. Indeed, you find that with young workers, black individuals who have some college end up with higher levels of unemployment than white individuals who dropped out of high school.

SIMON: Should we know about any difference that might be created because blacks and whites often tend to work for different companies or in different industries?

HAMILTON: Perhaps. There's a literature with regards to occupational crowding, which talks about the sorting of workers into certain types of occupations and industries. And one could even argue that that's the result of discriminatory barriers.

Like, for example, construction industry is particularly one that has a poor track record of hiring black with regards to white workers. I wouldn't call that unskilled work or low-skilled work but it's definitely low-credentialed work, but it offers relatively higher wages compared to some other types of jobs. Yet blacks consistently are crowded out of the low-skill attainment in terms of education but relatively high-wage occupations like construction, especially in comparison to something like service.

So, if we look at service industries, which offer relatively lower wages, you tend to find blacks are proportionately overrepresented in those jobs. And that actually speaks to the issue of qualifications, right? People have made the argument that, well, if you control for education, black workers show up with less soft skills - things like they don't show up to work on time, they have poor attitudes at work. And they argue that these things stem from concentrations of poverty, coming from backgrounds where you have poor education, poor family background and then poor neighborhoods. But it's ironic that you find them overcrowded in jobs in the service industry, where you have a great deal of contact with customers, a great deal of contact with co-workers.

So, if it was soft skills driving these ratios, one might expect that they would be crowded out of high-contact customer jobs and high-contact co-worker jobs.

SIMON: Professor Hamilton, are there a couple of things that you would recommend to anyone who asks that might be done to help the situation immediately, or as immediately as possible?

HAMILTON: The problems are dramatic. I gave you that ratio of two-to-one. Since we've been collecting unemployment data, we know that there's been only two years in which the black unemployment rate has dipped below 8 percent. And an 8 percent unemployment level at the national level is indicative of a crisis. So, the black population is in a constant crisis. To deal with this dramatic problem, we need dramatic policies.

In addition to dealing with the black community, I would advocate, and so has my colleague William Garrity, for a federal job guarantee. It's a bold dramatic policy that would provide worker security for not just blacks but all workers and have great benefits to the economy as a whole. And it's a better form of employment stimulus than stimulus itself. Rather than indirectly trying to stimulate jobs through aggregate demand from government spending, if you offer a job to an individual, and I'm talking about jobs towards productive work, a federal job guarantee would put a lot of these untapped resources who are out of work back to work.

SIMON: Derrick Hamilton is an associate professor of economics at the New School in New York. Thanks very much for being with us.